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2025 DIGILAW 678 (TS)

LRhaks Steel Sand Pvt. Ltd. v. State of Telangana

2025-05-19

T.VINOD KUMAR

body2025
ORDER : 1. This Writ Petition is filed for issue of Writ of Mandamus to declare the demand notice dated 20.12.2024 issued by the 4 th respondent, as being illegal, arbitrary and without jurisdiction. 2. Heard learned Counsel for the petitioner, learned Government Pleader for Industries and Commerce appearing for respondents and with the consent of learned Counsel for the parties, the Writ Petition is taken up for hearing and disposal at the stage of admission. 3. Shorn of unnecessary details, the case of the petitioner in brief, is that it was issued with a show cause notice dated 16.11.2024 by the 4 th respondent wherein it was alleged that on conducting of ETS survey by the Team of empanelled agency, the authorities have found the petitioner having extracted excess quantity and transported mineral to the tune of 87,875.24 metric tonnes; and that as the dispatch permits were obtained only for quantity of 60535 metric tonnes, the petitioner had contravened the provisions of Rule 26(1) and 26(3) of Telangana Minor Mineral Concession Rules, 1966 (for short ‘the Rules’) and is thus, liable to pay the normal seigniorage fee and 5 times penalty for the aforementioned excess quantity of mineral extracted and transported and called upon the petitioner to submit explanation within 15 days from the date of receipt of the said notice. 4. Petitioner further contends that on being served with the aforesaid notice, it had submitted an explanation dated 28.11.2024 on 02.12.2024. 5. It is the further case of the petitioner that by the aforesaid explanation submitted, it had brought to the notice of the authorities that out of the three quarry leases obtained by it, only one pit is currently operational and the crusher unit is located within the licenced leased area under valid Mineral Dealer licence issued. 6. It is also contended by the petitioner that by the aforesaid reply it had further submitted that Run-of-Mine material is transported solely within the designated lease area and that the Royalty payments and transit permits obtained were only for the quantity sold and the remaining stock of quantities could not be sold due to adverse market conditions impacting its operations, leading to suspension of crushing activities and power disconnection, including closing of the production activity from January due to power disconnection for non payment of electricity bills. 7. 7. Petitioner further contends that despite the aforesaid explanation, the respondent authorities have issued the impugned proceeding dated 20.12.2024 raising demand towards normal seigniorage fee and five time penalty and other fee payable, in all aggregating to a sum of Rs.4,07,82,902/- claiming that the petitioner has resorted to illicit excavation and transportation of 87,875.24 metric tonnes of Stone and Metal more than the permitted quantity in violation of Rule 26(1) and 26(3)(i) of the Rules. 8. Petitioner further contends that since the petitioner did not transport the Stone and Metal from the leased area, the claim of the respondents of the petitioner contravening Rule 26 of the Rules is without any basis and, as such, the impugned demand raised is without jurisdiction and thus, the petitioner is entitled to assail the action of the respondent authority by filing the present Writ Petition. 9. It is further contended by the petitioner that though the show cause notice as issued alleges contravention of Rule 26(1) and 26(3)(i) of the Rules, the impugned proceeding, however, makes reference to Rule 34(1) of the Rules and thus, the impugned proceeding travels beyond the show cause notice and thus, is without jurisdiction. 10. Per contra, learned Government Pleader appearing on behalf of the respondents on the other hand would submit that though the petitioner crusher unit is located within the area, the petitioner is required to obtain dispatch/transport permit transporting the stone mined from the pit head to the location of the crusher unit which is located at a distance and not at the pit mouth. 11. Learned Government Pleader contends that as per Rule 6 of the Telangana Mineral Dealer Rules, 2000, no mineral shall be transported or otherwise removed or carried away from any place without obtaining transit pass obtained from the concerned authorities. Thus, the transportation of stone excavated by the petitioner from the pit mouth to the crusher unit would have to be treated as in contravention of the aforementioned Rule, more particularly since the petitioner is also having a dealer licence. 12. Thus, the transportation of stone excavated by the petitioner from the pit mouth to the crusher unit would have to be treated as in contravention of the aforementioned Rule, more particularly since the petitioner is also having a dealer licence. 12. Learned Government Pleader would further contend that since the petitioner though claimed the crusher unit to be located within the leased area, since the quantity found at the crusher unit not being transported under dispatch permit, such excavation has to be treated as quarrying operation undertaken in contravention of the Rules, thereby attracting the provisions of Rule 26(1) and Rule 26(3)(i) of the Rules. 13. Learned Government Pleader would also contend that if the petitioner is aggrieved by the impugned proceeding, the petitioner has a remedy of Appeal or Revision provided under Rule 35 or 35-A of the Rules. 14. Learned Government Pleader would also submit that reference to Rule 34 of the Rules in the impugned proceeding is only for the purpose of justifying the action of the authorities in issuing show cause notice proposing to levy penalty under Rule 26 of the Rules and as the penalty has been levied only under Rule 26 of the Rules, the said proceeding cannot be held as without jurisdiction or travelling beyond the show cause notice for it to be set aside by this Court in exercise of writ jurisdiction without relegating the petitioner to avail the remedy of Appeal/Revision under the Act and the Rules. 15. I have taken note of the respective contentions urged. 16. Though on behalf of the petitioner it is contended that the alternate remedy provided under the Act being not being efficacious and the petitioner being entitled to assail the action of respondent in Writ jurisdiction under Article 226 of the Constitution of India, being an exceptional case on the ground that the impugned order travels beyond the show cause notice and it is without jurisdiction, a reading of the impugned order, however, would show that the penalty imposed on the petitioner is only under the provisions of Rule 26(1) and 26(3)(i) of the Rules and is not based on any other violation to hold that the impugned order having travelled beyond the show cause notice for this Court to set aside the same in exercise of extraordinary jurisdiction under Article 226 of the Constitution of India. 17. 17. Though, it is contended on behalf of the petitioner that since the impugned order is passed without taking note of the fact that the crusher unit is located within the leased area and as such there is no requirement to obtain any permission for transporting material from the quarry area to crushing unit even though located at a distance and not at the pit mouth, and is thus without jurisdiction for it to approach this Court invoking extraordinary jurisdiction, it is trite law that mere arriving at a wrong conclusion or non-consideration of a submission would not by itself make the order passed as without jurisdiction. It is only when the authority passing the order lacks power to pass such an order, then only it can be said as having passed in inherent lack of jurisdiction. Since, in the facts of the case, as it is not shown to this Court of the 4th respondent lacking inherent jurisdiction either to issue show cause notice or issue impugned demand notice thereafter, the said action cannot be held as without jurisdiction. 18. Further, a reading of Rule 6 of the Telangana Dealer Rules, 2000, indicates that no person shall transport or otherwise remove or carry any mineral from any place without obtaining transit pass from the concerned Mines and Geology authorities. A perusal of the dealer licence obtained by the petitioner would show that mineral dealer licence granted in Form-D is in respect of road metal from the place situated in survey No.32 in Arkathala village, Nawabpet Mandal of Vikarabad District, while the quarry lease obtained by the petitioner is for mineral building stone and road metal in Sy. No.32 of Arkathala village, Nawabpet Mandal of Vikarabad District. Thus, the petitioner upon excavating the mineral from the quarry lease area had transported the same to its licence dealer location where its crusher unit is situated and had converted them into building stone and road metal. Though the petitioner did not remove the excavated mineral after converting into building stone and road metal at its crusher unit site to outside location as permitted by the mineral dealer licence obtained, however, the petitioner did not obtain any dispatch permit for transporting the mineral from leased quarry area to its crusher unit site, as that would entail the petitioner requiring to pay seigniorage fee. This in the considered view of this Court has given rise for passing/issuing the impugned proceeding. 19. However, taking note of the fact that whether the transportation of excavated mineral from the pit head to the crusher unit site which petitioner claims to be situated within one of the three (3) ceased quarry areas, though the quarry areas wherein the unit situated is non-functional, can be considered as unauthorized quarrying operation are not by itself would not amount to the impugned demand having been issued without jurisdiction. 20. Thus, once it is held that the impugned demand notice is validly issued by the respondent exercising the powers under the Act, the natural corollary is that the Court should refrain from exercising its extraordinary jurisdiction under Article 226 of the Constitution of India and the petitioner should be relegated to avail the remedy provided under the Act [See: Commissioner of Income Tax and others v. Chhabil Dass Agarwal , (2014) 1 SCC 603 , United Bank of India v. Satyawati Tondon and others , (2010) 8 SCC 110 and M/s. Agarwal Industries Pvt. Ltd. v. The Commercial Tax Officer , Order dated 20.07.2010 of the erstwhile High Court of Andhra Pradesh in W.P. No. 2653 of 2009 ] 21. Thus, this Court is of the view that without expressing any opinion on the merits of the matter, the petitioner should be relegated to avail the remedy of Appeal/revision provided under the Act, instead of this Court entertaining the present Writ Petition under Article 226 of the Constitution of India, as it is settled position of law that in exercise of special jurisdiction “when an alternative and equally efficacious remedy is open to a litigant, he should be required to pursue that remedy and not to invoke the special jurisdiction of the High Court [See: Union of India Vs. T.R. Verma , MANU/SC/0121/1957; State of Uttar Pradesh and others Vs. Gujarat Ambuja Cement Ltd & Anr . (2005) 6 SCC 499 and State of M.P. Vs. Nerbudda Valley Refrigerated Products Pvt. Ltd. /b>. (2010) 7 SCC 751 . 22. For the aforesaid reasons, this Court is of the view that the petitioner is not entitled for grant of any relief in the present Writ Petition and should be relegated to avail the remedy provided under the Act. 23. Accordingly, the Writ Petition is disposed of. No costs. (2010) 7 SCC 751 . 22. For the aforesaid reasons, this Court is of the view that the petitioner is not entitled for grant of any relief in the present Writ Petition and should be relegated to avail the remedy provided under the Act. 23. Accordingly, the Writ Petition is disposed of. No costs. Miscellaneous petitions, if any, pending in the Writ Petition, shall stand closed.